Category: Regulations

Virginia Gov. Ralph Northam is poised to implement a new regulation without legislative approval to join 10 other states in a climate change agreement based on restricting carbon dioxide emissions from coal-fired power plants.

But lawmakers, policy analysts, and tea party activists in Virginia who oppose what they consider costly regulations of industry are raising questions about the economic and scientific arguments underpinning the proposed rule.

They say the Virginia General Assembly should have a straight up-or-down vote on Northam’s plan, in part to ensure that any revenue the Democratic governor raises from “carbon trading” is collected and dispersed in a manner consistent with the state Constitution.

The Regional Greenhouse Gas Initiative, or RGGI, is a multistate agreement that currently includes Connecticut, Delaware, Maine, Maryland, Massachusetts, New Hampshire, New York, Rhode Island, and Vermont. In addition to Virginia, New Jersey may rejoin the pact.

The public comment period for a draft version of Northam’s proposed regulation ended in April. The Virginia Department of Environmental Quality is expected to introduce a final version in November.

The seven-member Air Pollution Control Board then will be responsible for making a decision. Board members, appointed by the governor, operate independently from the Department of Environmental Quality.

Northam, a physician from the state’s Eastern Shore who previously was a state senator and lieutenant governor, took office in January after being elected governor last November.

Michael Dowd, director of the environmental agency’s Air and Renewable Energy Division, told The Daily Signal in a phone interview that the Air Pollution Control Board “has a lot of authority with respect to promulgating regulations.”

A board majority may “reject, accept, or modify” the proposed rule as it sees fit, Dowd said.

If the board decides in favor of the regulation, he said, it could go into effect by December.

The Virginia General Assembly does not go back into session until January, however. With Democrat gains in the state’s November 2017 elections, Republicans have a 51-49 edge in the House of Delegates and a 21-19 margin in the state Senate.

Officials of states that entered the Regional Greenhouse Gas Initiative argue that greenhouse gases such as carbon dioxide are responsible for dangerous levels of climate change, also known as global warming. These gases enter the atmosphere during the industrial burning of fossil fuels such as coal, natural gas, and oil.

However, a growing number of scientists question theories that link human activity to significant climate change, and instead point to natural forces.

New Jersey Gov. Phil Murphy, a Democrat, signed an executive order earlier this year directing his agencies to re-enter RGGI. Murphy’s Republican predecessor, Chris Christie, had withdrawn from the climate change agreement.

Participating states are required to impose a “cap and trade” arrangement. Government officials set an upper limit on carbon dioxide emissions from fossil fuel plants. But “allowances” may be traded back and forth among the companies subjected to the caps.

“Joining RGGI now is like joining a football team that’s trailing 40-3 in the 4th quarter,” Nick Loris, an energy policy analyst with The Heritage Foundation, said in an email to The Daily Signal. ‘There’s no real upside. No impact on climate. Higher electricity bills for families. Lost business opportunities.”

Questioning the Governor’s Plan

The problem with the development in Virginia is that “unelected regulators” have been granted too much authority over major policy decisions that will have significant statewide impact, Craig Rucker, executive director and co-founder of the Committee for a Constructive Tomorrow, told The Daily Signal.

“The RGGI system has been very damaging to those states that are participating,” Rucker said in a phone interview. “You see much higher electricity rates on average in those areas where RGGI is in effect, and you also see those states losing ground economically in comparison to other states that are not part of this agreement. And it should be noted that the RGGI states are not achieving anything in terms of lower global temperatures.”

The Committee for a Constructive Tomorrow, known as CFACT, is a Washington-based group that supports free market solutions in energy policy.

Virginia lawmakers should have the opportunity to weigh in on a regulatory change that could have “long-term ramifications,” Rucker said, adding:

Because the effects of these regulations are not always immediately evident and often materialize over time, I don’t think it’s healthy for our democracy to have this change implemented administratively by individuals who do not have to stand before the voters. We are talking about rising energy costs that will impact future generations and impact Virginia’s ability to compete economically with other states.

But Dowd, the state Department of Environmental Quality official, said the Northam administration disagrees with critics who say the governor is making an end-run around the General Assembly to join the multistate climate change pact.

“We’ve heard that argument and we disagree with it,” Dowd said in the interview with The Daily Signal. “Our position is, and it always has been, that the state air pollution law vests the state air board with broad authority to control air pollution, and that linking to RGGI in a carbon trade or carbon cap-and-trade program is well within the statutory, regulatory authority of the air board.”

While there will be “some expense” to energy consumers, the proposal has been carefully crafted to limit the impact, Dowd told The Daily Signal:

We have heard the concerns about [rising energy] costs and our response is that we have taken this into consideration in the economic modeling we have done, and the modeling indicates that the impact to ratepayers is relatively minimal. In fact, the impact to ratepayers should be a little over 1 percent between now and 2030. We think we have constructed a rule with the right approach and that this is the most cost-effective way to control carbon in Virginia.

In April, Northam vetoed a bill from Delegate Charles Poindexter, a Republican, that would have prohibited the governor or any state agency, including the Air Pollution Control Board, from entering into RGGI or creating any other cap-and-trade program without legislative approval.

“Climate change affects all citizens and business entities in the Commonwealth, especially those located in coastal regions,” the governor said, adding:

The Commonwealth must have all the tools available to combat climate change and protect its residents. These tools include the ability to adopt regulations, and rules and guidance that mitigate the impacts of climate change by reducing carbon pollution in the Commonwealth. The governor and state agencies should not be limited in their ability to protect the environment and in turn, the citizens of the Commonwealth.

Randy Randol, who analyzes energy and environmental issues for the Virginia Tea Party, said in a phone interview that the governor already has tacitly acknowledged limits to his authority over finances, and that these limits could affect implementation of RGGI.

“As predicted, Northam has requested that he be allowed to spend permit fee collections, confirming that he lacks authority to fully implement the program,” Randol said.

Virginia Natural Resources Secretary Matthew Strickler informed a legislative commission earlier this month that Northam would ask the General Assembly “to keep and spend the proceeds of a new electricity carbon tax, rather than find a way to return it to ratepayers,” according to news reports.

Strickler estimates that under the Regional Greenhouse Gas Initiative, Virginia utilities would have to purchase carbon credits that would generate $200 million in revenue.

Under the cap-and-trade plan, companies buy carbon credits from state governments, typically during “carbon auctions” consistent with RGGI regulations. State governments collect revenue as a result.

How this money is collected, distributed, and appropriated remains an open question and a major sticking point.

The carbon credits that energy companies would be required to purchase under such a plan would generate between $175 million and $208 million for Virginia government, according to a fiscal note attached to legislation from Democratic lawmakers to authorize a cap-and-trade plan. Lawmakers defeated that plan in a party-line vote.

“The Department of Environmental Quality originally sold RGGI as a recycling program to get the money back to the consumer,” Randol said. “The RGGI fee will be a direct pass-through to every class of electricity consumer—residential, business, and industry.”

The tea party activist added:

Utilities are immune because they will pass the tax along to the consumers. What the governor is calling a fee is really tax, and there are reasons why he doesn’t want to call it tax.

The Virginia Tea Party has opposed every ration and tax and cap-and-tax scheme that has been proposed. There was, for example, a proposal to tax power plant emissions to fund flood mitigation that we strongly opposed.

This proposal to move us into RGGI would impact the poorest residents of Virginia the most.

‘Where the Money Goes’

Poindexter, the state delegate who pushed the bill requiring the General Assembly to approve any move into RGGI, told The Daily Signal in a phone interview that he opposes the governor’s plan both legally and substantively.

Although the Virginia Constitution may give the governor latitude to join RGGI, it doesn’t provide him with the authority to control the appropriation and spending of funds derived from the multistate agreement, Poindexter said.

“Where the money goes and who controls how it’s spent is still up in the air, and therein lies the problem with the governor doing this on his own,” Poindexter said. “Under the Virginia Constitution and state law, money cannot be spent without appropriation from the General Assembly. What’s happening now is an attempt to work around constitutional requirements and the requirements of state law, to allow the governor to have control of the estimated $200 million in revenue from the sale of these carbon credits.”

Poindexter, who represents Patrick County and parts of Franklin and Henry counties, also is a member of the state Commission on Energy and Environment.

As a matter of policy, Poindexter said, he views the Regional Greenhouse Gas Initiative as detrimental to Virginia’s best interests. He anticipates that it will discourage energy production from inside the state and undermine future job opportunities.

“Virginia would not be putting itself in good company by joining RGGI,” the lawmaker said. “When you look at where the electricity rates are in those states that are now in RGGI versus what we have now in Virginia, my concern is that entering into this agreement would lead to electricity rates rising to some level that is equivalent or even higher than they are in those other RGGI states.”

“Also,” Poindexter said, “my understanding is that in RGGI states, electricity generation typically moves out of those states and the power is then imported. That would not be a healthy development for our state, should we start to lose those jobs related to energy generation.”

Rucker and others at the Committee for a Constructive Tomorrow also challenged the scientific premise underpinning RGGI and similar state-level agreements. They point to updated research that shows natural forces, as opposed to human activity, are primarily responsible for climate change.

EPA’s Proposed Rule

In the run-up to Saturday’s Virginia Tea Party Summit, another question was on the mind of participants.

Since the Environmental Protection Agency under the Trump administration has proposed a rule replacing the Obama administration’s Clean Power Plan with guidelines giving states more flexibility to determine how to address greenhouse gas emissions, isn’t RGGI now superfluous?

“Our concern with what the EPA has proposed is that it is not very stringent and that it’s really not going to move the ball forward in terms of regulating carbon emissions,” Dowd of the state Department of Environmental Quality said. “RGGI represents a far more stringent and more realistic approach, and I don’t think the ACE rule as proposed is strong enough to control carbon.”

But Heritage’s Loris said he views the Regional Greenhouse Gas Initiative as a losing proposition for Virginia.

“Interestingly, the United States isn’t leading the developed world in greenhouse gas reduction because of a regional cap-and-trade program,” Loris said. “The private sector’s investment in cheap, abundant, and affordable natural gas is the reason.”

Industry groups are ramping up efforts to have President Donald Trump send the Kigali Amendment—a change to the Montreal Protocol—to the Senate for ratification. The Amendment would phase out affordable refrigerants used in air conditioners and refrigerators for much pricier ones.

That’s good news for the patent holders of the new refrigerants and the heating and cooling industry, but bad news for you, the consumer.

The reality is the Kigali Amendment is a United Nations-imposed regulation that would take choices away from the customer while lining the pockets of special interests that have been gearing up for the change.

The 1987 Montreal Protocol was an U.N. agreement to phase out production of chlorofluorocarbons, believed harmful to the ozone layer. The Kigali Amendment is a U.N. treaty that would ban CFC’s replacement: hydrofluorocarbons (HFCs) and hydrofluoro-olefins (HFOs).

The new ban has hardly anything to do with protecting the ozone layer but instead is eliminating HFCs because of their potential impact on global warming.

Proponents of the Amendment have hailed the phase-out as a predictable path forward that will create jobs and give American manufacturers a competitive edge. They point to a study prepared for the Air-Conditioning, Heating, & Refrigeration Institute and the Alliance for Responsible Atmospheric Policy that new regulations will create 57,000 manufacturing jobs and an additional 33,000 if the U.S. ratifies Kigali.

Don’t believe the hype. Claiming that a U.N. mandate is an economic stimulus ignores the broken window fallacy.

In his essay “That Which Is Seen and That Which Is Not Seen,” French economist Frederic Bastiat outlines a scenario in which a shopkeeper breaks a window. He pays money to fix the window, creating a supposed “economic benefit” that circulates through the economy.

What is not seen, however, is what the shopkeeper could have spent that money on if the window hadn’t broken—for instance, a new pair of shoes. If the window wasn’t broken in the first place, the shopkeeper would have a window and new shoes.

Likewise, when the government subsidizes biofuels, what is not seen is that labor and capital could have been invested elsewhere in the economy, but are not. Private-sector investment that is not the result of regulations, subsidies, or mandates is the true root of economic growth and prosperity.

Another problem with the industry study is that it relies on a flawed input-output economic model.

First, there is the wrong assumption that regulation creates jobs. Sure, forcing a new refrigerant on consumers means businesses will have to comply with the new regulation. As households and businesses are forced to purchase new air-conditioning and refrigeration systems that use new alternative coolants, HFO manufacturers, equipment manufacturers, and maintenance and repair industries will all stand to benefit.

What the industry study ignores is the opportunity cost of the regulation. HFC alternatives are significantly more expensive. Even if the costs for HFOs or other alternatives fall over time with more widespread use, that’s hundreds of dollars more for a family to fix or replace an air conditioner. Alternatively, the family could have spent that money on a vacation or at the grocery store.

On the other hand, the regulation will prevent the hotel from hiring a new employee, or a restaurant from expanding its kitchen—or consumers will just bear the added costs as room rates and menu prices increase. Regulations force businesses to spend money that could have otherwise been spent elsewhere in the economy.

On net, the economic costs of the Kigali Amendment will outweigh the benefits. After all, if a newer, more energy-efficient technology were going to replace an older one, it would occur without a mandate from the U.N.

The input-output model makes the case that Kigali would produce economic gains by including “induced output,” which “represents the additional demand generated by the disposable income earned in the industry.” In other words, the those who work in the industry that would benefit from the regulation would receive higher incomes, and they’ll spend that money elsewhere, creating a positive ripple effect throughout the economy.

But again, an input-output economic analysis ignores where a family could have spent their money absent the regulation, and the ripple effect that spending would have had. If instead of paying for an exorbitantly more expensive A/C unit, the family took a vacation to Florida, the disposable incomes of the resort employees would similarly increase and they would spend their higher paychecks on a new bike and so on.

The difference is, one scenario is the market allowing for choice while the other involves an international body forcing decisions on households and businesses. One involves wealth creation, the other involves wealth erosion.

Note that even if the U.S. does not ratify the Kigali Amendment, U.S. companies will still be able to sell Kigali-compliant products to other countries that have chosen to phase out HFCs. So long as a domestic company chooses to produce HFOs or a different alternative compliant with the stipulations in Kigali, they could sell their product to any of those countries, including within the U.S.

By refusing to ratify Kigali, the Senate would ensure that Americans enjoy more choices and lower-cost options. Homeowners or businesses who need to purchase or repair an air conditioner or commercial unit will have the option of purchasing HFCs or costlier HFOs. Fixing or replacing an A/C unit or a refrigerator when it needs to be fixed will still create jobs, but it will be driven by the consumer’s actual needs—not regulatory dictate.

We’ve heard the “regulations create jobs” argument before from companies who stand to benefit from policies hatched by bureaucrats. Proponents of the energy-efficiency mandates like the incandescent light bulb ban, or excessive regulations on power plants, have similarly argued regulations will stimulate investment in these industries.

But these arguments always ignore the consumer, who will be made much worse off through higher prices and fewer choices.

The economic growth argument for Kigali is more of the same stale thinking.

Despite America’s energy dominance and the economic benefits that accompany it, an abundance of natural resource potential in the U.S. remains untapped.

Why? A key reason is the federal government owns and manages those resources. Federal regulations and federal land ownership have rendered vast quantities of recoverable oil and natural gas onshore and offshore either inaccessible or costlier to extract.

The current leasing and permitting process has frustrated people of all political beliefs. On average, the federal processing of an application for permit to drill in the last year of the Obama administration was 257 days, while state processing has typically been 30 days or fewer.

While the Interior Department is working tirelessly to reduce permitting delays, this massive time disparity prevents market forces from working effectively. When prospective drillers have to wait many months to get approval, the prospect of drilling in a timely manner can often be implausible.

Even though many federal proposals are approved, fluctuations in the price of oil combined with a long waiting period create the type of uncertainty that often prevent prospective drillers from even attempting the process. Authorizing states to manage onshore and offshore resource production for a greater percentage of the revenue than the current system will create a new and better system that permits industry to better respond to changing market conditions.

Last week, the House Natural Resources Committee held a hearing to discuss enhancing state management of natural resources on federal lands and waters. Draft legislation introduced by the committee would empower states to have more control over the leasing, permitting, and regulations of oil and gas production.

It would also authorize a state to approve or disapprove of each lease sale offered in federal waters if the area is within the state’s administrative boundaries. The amount of royalty revenue a state would collect would depend on how many lease blocks a state approved.

State control, local governance, and private-sector participation would result in more accountable, effective management. While the federal government can simply shift the costs of mismanagement to federal taxpayers, states have powerful incentives for better management of resources on federal lands. State governments can be more accountable to the people who will directly benefit from wise management decisions or suffer from poor ones.

Opponents of the proposed legislation said this bill would give oil and gas priority over other economic interests a state may have. For instance, coastal states have stated concerns that offshore drilling would possibly hurt their tourism and fishing industries.

But states like Louisiana have proven you can have your oil and seafood, too. In 2014, the Louisiana oil industry generated $44 billion for the state economy and another $36 billion when including related infrastructure and refining activity.

In addition to energy production, seafood and tourism industries stand out as significant contributors to Louisiana’s economy. Louisiana represents 30 percent of the commercial fishing for the continental United States and are substantial producers of shrimp, oysters, crawfish, and crabs. Annually, the industry creates $2.4 billion in economic growth for Louisiana.

These industries work hand-in-hand for the economic benefit of the state.

Opponents of the draft legislation have also held inconsistent views on the principles of federalism. The proposed legislation would empower states with a choice that, under the current system, they simply do not have.

Under current law, the Department of Interior could easily make choices for all states and allow for energy exploration in federal waters, regardless of whether those states want it or not. The proposed legislation would at the very least give states a say in the decision.

As Chairman of the Natural Resources Committee Rob Bishop, R-Utah, pointed out during the hearing, Democrats seem to only want federalism in certain cases. The same Democrats who now want federalism in the case of coastal states did not want federalism in the recently reversed case of the Bears Ears Monument issue in Utah. They’ve opposed empowering states to oversee natural resource production and other land use decisions on federal lands.

Bishop noted the hypocrisy of the Democrats specifically by contrasting their rejection of the wishes of local citizens in the Utah case with their support of the wishes of citizens who opposed drilling on federal waters. Federalism seems to have been lost to the Democrats and their current stance is, at best, inconsistent.

A Washington-centric approach to management stifles creative, collaborative solutions to competing interests that could be resolved at local, state, or regional levels without the added baggage of national political battles and federal regulatory processes. While states and local communities may not always make perfect decisions, the best environmental policies are site-specific and situation-specific and emanate from liberty.

The Natural Resources Committee should be commended for introducing draft legislation that would improve the current process by engaging the appropriate stakeholders and better aligning incentives for economic development and environmental protection.

The declining cost of solar panels and the widespread adoption of rooftop solar in California lead to many cocktail party discussions about the competitiveness of green energy. While at first glance it may seem that solar power and other renewable energy sources are able to compete with conventional resources, a closer examination of the characteristics and costs of electricity systems demonstrates that current renewable technologies are not economically competitive.

The fixed costs of electricity systems, the capital costs of transmission and distribution systems, are large. Actual electricity tariffs do not typically recover fixed costs explicitly and separately from electricity use. Instead they recover them through use charges per kWh. If electricity pricing were more efficient, customers would pay a large fee for the use of the transmission and distribution systems disconnected from the amount of electricity they use and would be charged a separate variable fee based on actual consumption. (See this article by Ahmad Faruqui and Mariko Geronimo Aydin in the Fall 2017 issue of Regulation for a more thorough discussion of electricity pricing.) Thus, current bills do not inform consumers about how high the fixed costs of the system really are.

Understanding the significance and recovery of fixed costs is important because of the manner through which customers with solar panels on their roof are reimbursed for the power they generate. Solar production in many states, especially California, is reimbursed at full retail rates. But when a household produces solar power and reduces the use of system-generated electricity, the system saves only the marginal costs of the power that it did not have to produce, which is usually much less than the retail rate. None of the large fixed costs are saved.

In California, because of its tiered retail rate structure, the discrepancy between the retail rate and the amount the system saves because of rooftop solar production is large. The marginal cost of power generation is about 6-10 cents per kWh, but customers are reimbursed at full retail rates (many at over 30 cents per kWh) rather than the lower marginal costs of system generation. Reimbursement at full retail rates shifts the fixed costs of the electric system from solar panel households to other users. Without the excessive payments, decentralized solar would not be competitive.

Other renewable generation sources would appear to be competitive with natural gas generation. According to estimates of the total costs of various generation technologies over their operating lifetime, large-scale centralized solar generation in the deserts of the American southwest and large-scale onshore wind generation both have costs that are competitive with new natural gas generation. (Offshore wind is much more costly. See my blog on Cape Wind, a failed plan to build a wind farm off the coast of Massachusetts.)

However, even if the lifetime average costs of wind and solar are the same as coal or natural gas, the equivalence needs to be qualified. Different electricity generation technologies are very imperfect substitutes. The marginal value of electricity varies across time because demand varies by time of day and space because of transmission constraints. For example, wind power supply is greatest during winter nights, when demand is low, and lowest during summer when demand is highest. Wind is also most plentiful far from where people live and consume electricity, meaning it incurs additional costs to transport the electricity to people. At least solar output is large during the summer afternoon peak demand period. But both solar and wind are not dispatchable. That is, their output cannot be made to vary up or down.

Until cost-competitive green energy that is dispatchable is available, renewable sources of electricity require backup conventional generation. Because the sun eventually sets, and the wind stops blowing, natural gas generation whose output can be varied (sometimes quickly) must be available as backup. The fixed and variable costs of the backup must be paid by someone. These hidden costs need to be considered in any calculation of “cost competitiveness.”

Future technological breakthroughs, such as more efficient batteries to store electricity and more cost effective dispatchable solar power sources, may make green energy a better substitute for conventional generators. But for the time being, without governments putting their thumbs on the scale, green energy is not competitive.

U.S. Secretary of the Interior Ryan Zinke announced that the Department is proposing the largest oil and gas lease sale ever held in the United States –76,967,935 acres in federal waters of the Gulf of Mexico, offshore Texas, Louisiana, Mississippi, Alabama and Florida. The proposed region-wide lease sale, offering an area about the size of New Mexico, is scheduled for March 2018 and includes all available unleased areas on the Gulf’s Outer Continental Shelf, surpassing last year’s region-wide lease sale by about one million acres.

“In today’s low-price energy environment, providing the offshore industry access to the maximum amount of opportunities possible is part of our strategy to spur local and regional economic dynamism and job creation and a pillar of President Trump’s plan to make the United States energy dominant,” Secretary Zinke said. “And the economic terms proposed for this sale include a range of incentives to encourage diligent development and ensure a fair return to taxpayers.”

Proposed Lease Sale 250, which will be livestreamed from New Orleans, will be the second offshore sale under the National Outer Continental Shelf Oil and Gas Leasing Program for 2017-2022. Lease Sale 249, held in New Orleans last August, received $121 million in high bids. In addition to the high bids and rental payments, the Department will receive royalty payments on any future production from these leases. Outer Continental Shelf (OCS) lease revenues are directed to the U.S. Treasury, Gulf Coast states, the Land and Water Conservation Fund and Historic Preservation Fund.

“In order to strengthen America’s energy dominance, we must anticipate and plan for our needs for decades to come,” said Senator Lisa Murkowski, Chairman of the Senate Committee on Energy & Natural Resources. “The administration’s decision to move forward with the largest offshore lease sale in our nation’s history is a key part of that effort. Whether in Alaska or the Gulf of Mexico, we should all support responsible development because it creates high-paying jobs, strengthens national security, and keeps energy affordable for our families and businesses.”

“President Trump’s team is following through on their commitment to advancing America’s energy independence,” said Senator Roger Wicker. “Unlike the previous administration, this one understands that expanded offshore energy development benefits working families, consumers, and our national security. This is a win for Mississippi and the entire country.”

“President Trump and his administration are following through on their promise to end the war on American energy,” said Senator Bill Cassidy. “Investing in energy creates better jobs with better benefits for working families, strengthens our national security and strengthens our energy independence.”

“This is great news that our oil and gas industry in Louisiana sorely needs. This is the largest sale in U.S. history, and it will create jobs and bolster our state and national economy,” said Senator John Kennedy. “Our Louisiana workers are ready to go back to work.”

“President Donald Trump made clear his desire to ensure Americans can use our own natural resources to produce the energy vital to our economy and national security,” said Alabama Governor Kay Ivey. “As he has done time and again, President Trump has proven to the people of Alabama that he is a man of his word, and we are grateful to him and to Secretary Ryan Zinke for their determination to open a vast tract of American waters to oil and gas exploration. This decision is not only in the best interest of all Americans, it allows Gulf Coast states, like Alabama, to utilize our natural resources not only to provide energy for our nation, but increased economic opportunities for our people.”

“Mississippi welcomes Secretary Zinke’s action to carry out the president’s vision for American energy dominance,” said Mississippi Governor Phil Bryant. “This will strengthen our state’s status as a leader in oil and gas exploration and create good jobs for hardworking Mississippians.”

“If we’re serious about energy dominance and long-term energy affordability, we must create certainty about future access in the Outer Continental Shelf,” said Congressman Rob Bishop, Chairman of the House Committee on Natural Resources.“Secretary Zinke should be commended for his leadership to create that certainty and realign Interior as a partner for industry to advance responsible energy development. This is a welcomed announcement on that front. Congressionally, we will continue to move forward on a comprehensive overhaul of onshore and offshore federal lands energy policy to help Interior expand even greater access, streamline permitting and increase revenues to both states and the U.S. Treasury.”

“Secretary Zinke’s announcement is welcome news and I look forward to continuing to work with the administration to put consumer’s interests first while promoting job creation and modernizing our nation’s energy infrastructure,” said Congressman Greg Walden, Chairman of the House Committee on Energy & Commerce. “The president and his administration have placed energy independence and security at the top of their agenda, and this committee has been leading the way in examining policies that seek to streamline siting and permitting of the nation’s oil and gas pipelines.”

“President Trump has stated that he wants our country to exert ‘energy dominance’ throughout the world, and this lease sale is another bold step in that direction,” said House Majority Whip Steve Scalise. “I applaud today’s announcement by Secretary Ryan Zinke to offer the largest offshore oil and gas lease sale in U.S. history. My constituents in Southeast Louisiana will be leading the way in this exploration and development that will create good jobs and kickstart more economic growth. This bold action helps us continue fighting for the responsible development of our natural resources that bring critical dollars to restore our coast.”

“As a long-time advocate for opening up more of the Gulf of Mexico, it’s refreshing to work with an Administration that understands it’s true energy potential,” said Congressman Pete Olson. “Oil production, when done safely and responsibly, is a win for Texas and the Gulf Coast economy, and adds to America’s energy security. I applaud Secretary Zinke for moving forward with this lease sale and hope these opportunities to tap into our energy potential continue.”

“Secretary Zinke’s announcement of the largest oil and gas lease sale in our country’s history is welcome news. The oil and gas industry provides thousands of direct and indirect jobs to the people of Mississippi,” said Congressman Gregg Harper. “This lease sale has the potential to create new opportunities for our state and nation as advances in technology continue to make the United States a world leader in natural resource production.”

“I applaud Secretary Zinke and the Department of Interior for their efforts to spur energy production and support communities along the Gulf Coast. Revenue from these leases will be a huge boost for Gulf states, like Alabama, and will help us continue conservation and preservation of our treasured coastal areas,” said Congressman Bradley Byrne. “Through developments like this, we can ensure American energy dominance and make life better for Gulf Coast families.”

The estimated amount of resources projected to be developed as a result of the proposed region-wide lease sale ranges from 0.21 to 1.12 billion barrels of oil and from 0.55 to 4.42 trillion cubic feet of gas. Most of the activity (up to 83% of future production) from the proposed lease sale is expected to occur in the Central Planning Area.

Proposed Lease Sale 250 includes 14,375 unleased blocks, located from 3 to 230 miles offshore, in the Gulf’s Western, Central and Eastern planning areas in water depths ranging from 9 to more than 11,115 feet (three to 3,400 meters). Excluded from the lease sale are blocks subject to the Congressional moratorium established by the Gulf of Mexico Energy Security Act of 2006; blocks that are adjacent to or beyond the U.S. Exclusive Economic Zone in the area known as the northern portion of the Eastern Gap; and whole blocks and partial blocks within the current boundary of the Flower Garden Banks National Marine Sanctuary.

“American energy production can be competitive while remaining safe and environmentally sound,” said Vincent DeVito, Counselor for Energy Policy at Interior. “People need jobs, the Gulf Coast states need revenue, and Americans do not want to be dependent on foreign oil. We have heard their message loud and clear.”

The lease sale terms include stipulations to protect biologically sensitive resources, mitigate potential adverse effects on protected species, and avoid potential conflicts associated with oil and gas development in the region. The terms and conditions for Lease Sale 250 in the Proposed Notice of Sale are not final. Different terms and conditions may be employed in the Final Notice of Sale, which will be published at least 30 days before the sale.

The Bureau of Ocean Energy Management (BOEM) estimates that the OCS contains about 90 billion barrels of undiscovered technically recoverable oil and 327 trillion cubic feet of undiscovered technically recoverable gas. The Gulf of Mexico OCS, covering about 160 million acres, has technically recoverable resources of over 48 billion barrels of oil and 141 trillion cubic feet of gas.

All terms and conditions for Gulf of Mexico Region-wide Sale 250 are detailed in the Proposed Notice of Sale (PNOS) information package, which is available at: http://www.boem.gov/Sale-250/. Copies of the PNOS maps can be requested from BOEM’s Gulf of Mexico Region’s Public Information Unit at 1201 Elmwood Park Boulevard, New Orleans, LA 70123, or at 800-200-GULF (4853).

The Trump administration acquiesced to the ethanol lobby in a recent decision on the costly Renewable Fuel Standard (RFS), says the Wall Street Journal. Under a Bush-era 2007 law, the mandated amount of biofuels in your gas tank is increasing, which puts upward pressure on gas and food prices and likely harms the environment.

Rather than supporting repeal of the anti-environmental RFS, the EPA announced it “won’t reduce its proposed 19.24 gallon biofuels quota for 2018, and many even increase it,” said the WSJ. Sadly, the administration “caved under pressure from the ethanol lobby and political extortion from Republican Senators Joni Ernst, Deb Fischer, and Chuck Grassley.”

At DownsizingGovernment.org, Nicholas Loris explains how the RFS harms consumers, damages the economy, and produces negative environmental effects. The RFS is also a bureaucratic nightmare, and has spawned a complex credit-trading system, which investor Carl Icahn said is a “$15 billion market full of manipulation, speculation and fraud.”

Loris notes that ethanol has only two-thirds the energy content of regular gas, so drivers get fewer miles per gallon the higher the share of ethanol and other biofuels mixed into their tanks.

So the next time you are pumping gas and see that “10% Ethanol” sticker, remember it’s a Big Government swindle perpetrated by the GOP.

The Trump administration is attempting to do what past administrations have either failed to do or blocked: open up part of the Arctic National Wildlife Refuge for oil and gas drilling.

The House recently passed a budget proposal that opens the door to allowing drilling in the refuge. The bill now stands in the Senate and could be well received at the White House, which included royalties from drilling in the refuge in its budget proposal.

Last month, The New York Times obtained an internal memo from the Interior Department, which proposed the lifting of restrictions on exploratory seismic studies in the Arctic National Wildlife Refuge. The agency was directed to provide an environmental assessment and a rule allowing for new exploration plans.

The federal government established the wildlife refuge in 1960. It first consisted of 8.9 million acres, but today accounts for 19.3 million acres.

Some 10.4 billion barrels of oil are believed to be in the 1.5 million acres known as the “1002 area,” but the last time the U.S. Geological Survey studied the area was in 1998. Drilling would likely only occur in some 2,000 acres, representing just 0.01 percent of the total land mass of the refuge.

It is noteworthy that those in Alaska who would be directly impacted by the drilling recognize its value.

Mayor Harry Brower Jr., who represents a borough in the wildlife refuge, said, “North Slope Borough residents recognize the importance of oil and gas to our local economy and the ability of our borough and city governments to provide public services.”

The native Iñupiat people who live within the refuge also welcome the drilling. Matthew Rexford, president of the Kaktovik Iñupiat Corp., a village corporation established following the Alaska Native Claims Act of 1971, wrote:

As Iñupiat, we stand to be inarguably the most affected by oil and gas activity in the Arctic. Therefore, we have the greatest stake in seeing that any and all development is done in a manner that keeps our land and subsistence resources safe. We know it can be done, because it’s already being done. Now is the time to open [Arctic National Wildlife Refuge] to drilling.

The Voice of the Arctic Iñupiat, a 21-member nonprofit corporation, unanimously voted to pass a resolution backing “safe and reasonable development” in the wildlife refuge.

Moreover, the results of a 2017 survey of Kaktovik, a town in the 1002 area, show that 71 percent of those surveyed think oil and gas has the most significant economic impact on their community. Eighty-six percent view the offshore oil and gas industry as favorable.

Nevertheless, opponents of drilling argue that there is no need to open the wildlife refuge because oil prices are low. the problem with this argument is that no one knows what the price of oil will be years, let alone decades, from now, and drilling is a multiyear endeavor.

This objection is likely just a red herring from their real desire to block any natural resource development. To environmentalists, there is never a good time to open up the wildlife refuge to drilling.

Opponents also worry that opening up the reserve will come with enormous environmental risks in a “crown jewel” of wilderness. But in reality, the 1002 area has no trees, deep-water lakes, or maintain peaks at risk.

Further, fracking technology has made oil recovery more efficient, and it would only take place in a small portion of the region.

Environmental policy should be tailored to specific sites and situations, and should be decided by those closest to the people who have the most to gain or lose by those decisions.

In this case, Alaskans should decide, and they should not have to consult hundreds of members of Congress to make these decisions.

But until they have control, the future of the Arctic National Wildlife Reserve rests in the hands of Congress and President Donald Trump.